What Intel sees in will.i.am

FORTUNE — Celebrity endorsements are commonplace, from Capital One pitchman Alec Baldwin to Revlon “brand ambassador” Halle Berry. Such arrangements are normally simple: company pays celeb to tout its products. Last year, however, Intel came up with a new wrinkle on the formula by hiring hip-hop star will.i.am as its “director of creative innovation.”

The giant chipmaker issued a breathless announcement, describing the engagement as a “multi-year, hands-on creative and technical collaboration.” The Black Eyed Peas frontman, meanwhile, gushed: “Teaming up with the scientists, researchers and computer programmers at Intel (INTC) to collaborate and co-develop new ways to communicate, create, inform and entertain is going to be amazing.”

So how, exactly, is the genial rapper and producer contributing to the development of Intel’s next-generation microprocessors? At this year’s Consumer Electronics Show in Las Vegas, CEO Paul Otellini announced that Intel was sending will.i.am on a world tour to promote the creative possibilities of the Ultrabook, a line of Intel-branded notebooks designed to compete with Apple’s (AAPL) Macbook Air. Trailed by Intel video crews, will.i.am is using Ultrabooks to communicate with his two million Twitter followers and compose new music with creative help from a local artist in each city. Fans can visit Intel’s Ultrabook Project site to download free tracks and watch video of will.i.am on the road.

All this sounds more like high-concept marketing than chip design. Tellingly, the Intel executive who first dreamed up the will.i.am partnership is senior marketing VP Johan Jervoe, a Dane who previously led global branding efforts at McDonald’s (MCD), where he devised the “I’m lovin’ it” campaign. But Jervoe and other Intel execs strenuously deny that will.i.am is a mere celebrity pitchman. “This is not Will flying around the world with an Ultrabook, smiling and saying ‘Buy this,’” Jervoe adds. “Technology is central to what he does for a living.”

Fortune recently caught up with will.i.am at the Record Plant, a legendary recording studio in Hollywood where he keeps an office. The previous night, he and Stevie Wonder had headlined a charity concert that raised $5 million for his personal charity, which provides mentoring and college scholarships to young people in Boyle Heights, the hardscrabble Los Angeles neighborhood where he grew up. In the studio next door, an orchestra was setting up to record strings for a future Black Eyed Peas track. Wearing baggy black cargo shorts and munching pistachio nuts from a large bowl on his coffee table, the 36-year-old rapper offered his own take on the Intel relationship.

“I sought them out because I wanted to make hardware, do computers, tablets, phones,” he says. “But I didn’t want to just put my signature on some product. Artists are always putting their names on shit. Intel makes the brain — that’s why I wanted to hook up with them.”

Intel has yet to release a will.i.am hardware line. But the rapper devoted time last year to meeting with Intel technologists. They’ve discussed the computational challenges involved with putting on a virtual Black Eyed Peas concert attended by thousands of avatars, all interacting with the band in immersive 3D.

Will.i.am also told Intel that he’d like to stop using a microphone on stage. Instead he wants a “macrophone”, a smartphone that would act as a networked amplification and recording device, allowing him to record each concert, isolate his favorite moments and blast them out for consumption, remixing and further distribution by his global fanbase. Intel thought that sounded pretty cool and has assigned a couple of technologists to work on a proof-of-concept.

At the end of the day, Intel clearly hopes that will.i.am’s futuristic celebrity vibe will aid their efforts to compete in the burgeoning mobile communications market, where the company faces stiff competition from Qualcomm (QCOM), ARM and other mobile chipmakers. To do that, the company needs to create a hardware/software ecosystem that spans all devices, from PCs to tablets to phones. “Intel is still a horizontal company in a world where vertical companies like Apple are starting to win,” says Hassan Miah, a former Intel Capital executive who now heads the mobile streaming music startup UrFilez. “If consumers believe that Intel offers the most complete user experience, Intel wins.”

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